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Is selling shares of a subsidiary considered sale of an undertaking?

Updated : December 19, 2018 06:25 AM IST

Section 180 of the Act defines ‘undertaking’ to mean an undertaking in which the investment of the company exceeds twenty per cent of its net worth as per the audited balance sheet of the preceding financial year.
The provisions do not clarify whether sale of shares of a subsidiary or a downstream company would qualify as a ‘sale of an undertaking’.
It will be pertinent to note that the Sebi recognises the concept of a ‘material subsidiary’.
Is selling shares of a subsidiary considered sale of an undertaking?

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